Xstrata plumps for iron ore with $381m takeover

City A.M. Reporter
COAL and base metals miner Xstrata pushed deeper into the iron ore sector yesterday with a $381m (£246.5m) agreed takeover of Australian-listed Sphere Minerals, which holds magnetite iron ore deposits in Mauritania.

The sale will provide FTSE-100-listed Xstrata with its first producing assets, to supplement its iron ore explorations in the Republic of Congo and planned iron ore extraction plant in Australia.

“This will give Xstrata a footprint in a reasonably established iron ore province, with a lot of development potential and resource upside,” said RBC Capital Markets analyst Chris Drew.

Xstrata sent Sphere’s shares soaring with its $2.50 cash offer, while its own London-listed shares closed 2.9 per cent down at 989.6p.